NORMA GROUP SE
Overview of Key Figures 2016 Q1 2016 Q1 2015 change in % Order situation Order book (31 Mar) EUR millions 284.7 300.0 5.1 Income statement Revenue EUR millions 226.6 221.5 2.3 Gross profit EUR millions 137.7 133.1 1 3.5 Adjusted EBITA 1 EUR millions 40.1 39.2 2.2 Adjusted EBITA margin 1 % 17.7 17.7 n / a EBITA EUR millions 39.6 36.2 9.5 Adjusted profit for the period 1 EUR millions 22.6 22.9 1.1 Adjusted EPS 1 EUR 0.71 0.72 1.1 Profit for the period EUR millions 19.4 17.9 8.5 EPS EUR 0.61 0.56 8.5 Cash flow Operating cash flow EUR millions 19.4 10.3 89.2 Operating net cash flow EUR millions 11.8 11.6 1.1 Cash flow from investing activities EUR millions 11.1 10.5 5.7 Cash flow from financing activities EUR millions 1.6 12.2 86.7 Balance sheet 31 Mar 2016 31 Dec 2015 Total assets EUR millions 1,164.1 1,167.9 0.3 Equity EUR millions 437.1 429.8 1.7 Equity ratio % 37.5 36.8 n / a Net debt EUR millions 347.8 360.9 3.6 Non-financial control parameters Q1 2016 Q1 2015 Number of new patent applications 22 38 42.1 Defective parts per million (PPM) 17 14 21.4 Quality-related customer complaints per month 8 10 20.0 Employees 31 Mar 2016 31 Dec 2015 Core workforce 5,097 5,121 0.5 Share data IPO April 2011 Stock exchange Frankfurt Stock Exchange, Xetra Market segment Regulated Market (Prime Standard), MDAX ISIN DE000A1H8BV3 Security identification number A1H8BV Ticker symbol NOEJ Highest price Q1 2016 2 EUR 51.540 Lowest price Q1 2016 2 EUR 39.895 Closing price as of 31 Mar 2016 2 EUR 49.230 Market capitalisation as of 31 Mar 2016 2 EUR millions 1,569 Number of shares 31,862,400 1 Adjustments are described in chapter Adjustments on p. 6. Date of publication: 4 May 2016 2 Xetra price.
3 4 Highlights First Quarter 2016 6 Course of Business 6 Earnings, Assets and Financial Position 9 Outlook 10 Consolidated Statement of Comprehensive Income 12 Consolidated Statement of Financial Position 16 Consolidated Statement of Cash Flows 18 Segment Reporting 20 Financial Calendar, Contact, Imprint EXPLANATION OF SYMBOLS Internet Cross Reference Reference to the 2015 Annual Report
4 NORMA Group SE Interim Statement Q1 2016 Highlights First Quarter 2016 DEVELOPMENT OF SALES Q1 2016 EFFECTS ON GROUP SALES in EUR milions in EUR millions share in % Q1 2015 221.5 Q1 2016 226.6 Sales Q1 2015 221.5 Organic growth 5.2 2.4 Currency effects 0.2 0.1 Sales Q1 2016 226.6 2.3 0 100 200 DISTRIBUTION OF SALES BY SALES CHANNELS DEVELOPMENT OF SALES CHANNELS in % EJT (63) 62 38 (37) DS Q1 2015 in brackets EJT DS Q1 2016 Q1 2015 Q1 2016 Q1 2015 Group sales (in EUR millions) 139.0 138.9 86.6 81.8 Growth (in %) 0.1 5.8 Share of sales (in %) 61.6 62.9 38.4 37.1
5 COSTS OF MATERIALS AND COST OF MATERIALS RATIO 1 Materials used (in EUR millions) Cost of materials ratio (in %) PERSONNEL EXPENSES AND PERSONNEL COST RATIO Personnel expenses (in EUR millions) Personnel cost ratio (in %) 100 91.0 90.1 50 80 60 41.1 39.8 40 40 75 40 63.2 60.6 60 27.3 27.9 45 20 30 20 15 0 30 0 0 Q1 2015 Q1 2016 Q1 2015 Q1 2016 OTHER OPERATING INCOME AND EXPENSES ALSO IN RELATION TO SALES 1 Other operating income and expenses In relation to sales (in %) (in EUR millions) ADJUSTED EBITA AND ADJUSTED EBITA MARGIN 1 Adjusted EBITA (in EUR millions) Adjusted EBITA margin (in %) 29.1 28.1 30 20 39.2 40.1 40 25 25 20 12.7 12.8 30 17.7 17.7 20 15 10 20 15 10 10 10 5 0 0 0 0 Q1 2015 Q1 2016 Q1 2015 Q1 2016 OPERATING NET CASH FLOW CORE WORKFORCE BY SEGMENT in EUR millions Q1 2016 Q1 2015 (Adjusted) EBITDA 1 45.4 44.5 Change in working capital 24.1 22.4 Investments from operating business 9.5 10.5 Operating net cash flow 11.8 11.6 in % Asia-Pacific 15 Americas 28 57 EMEA 1 Adjustments are described in chapter Adjustments on p. 6.
6 NORMA Group SE Interim Statement Q1 2016 Course of Business NORMA Group s business developed as expected overall in the first quarter of 2016. Therefore none of the Company's relevant performance indicators deviated significantly from the forecast values. Earnings, Assets and Financial Position ADJUSTMENTS In the first three months of 2016, depreciation of tangible assets from purchase price allocations in the amount of EUR 0.5 million (Q1 2015: EUR 0.6 million) was presented within EBITA (earnings before interest, taxes and amortisation of intangible assets) and amortisation of intangible assets from purchase price allocations in the amount of EUR 4.1 million (Q1 2015: EUR 4.4 million) was adjusted within EBIT as in previous years. No further adjustments were made in the reporting period. In the same period of the previous year, expenses totalling EUR 2.5 million were adjusted within EBITDA (earnings before interest, taxes, depreciation of tangible assets and amortisation of intangible assets) in connection with the acquisition and integration of National Diversified Sales, Inc. (NDS). EARNINGS POSITION Order backlog The order backlog amounted to EUR 284.7 million on 31 March 2016 and was thus 5.1% lower than in the comparable prior year period (31 Mar 2015: EUR 300.0 million). Sales increased as expected Group sales amounted to EUR 226.6 million in the first quarter of 2016 and were thus 2.3% higher than last year s level (Q1 2015: EUR 221.5 million). As expected, organic growth in the first quarter of 2016 was positive compared to the prior year quarter and amounted to 2.4%. This was due to the positive developments of the European automotive industry and the water business. In contrast, the sustained weakness in the commercial vehicle and agricultural machinery sectors in the Americas had a negative impact on the development of sales for NORMA Group. In addition, negative currency effects lowered the Group s sales growth by 0.1%. ADJUSTMENTS* in EUR millions Q1 2016 unadjusted Total adjustments Q1 2016 adjusted Revenue 226.6 0 226.6 Changes in inventories of finished goods and own work capitalised 0.7 0 0.7 Other own work capitalised 0.5 0 0.5 Raw materials and consumables used 90.1 0 90.1 Gross profit 137.7 0 137.7 Other operating income and expenses 29.1 0 29.1 Employee benefits expense 63.2 0 63.2 EBITDA 45.4 0 45.4 Depreciation 5.8 0.5 5.3 EBITA 39.6 0.5 40.1 Amortisation 6.3 4.1 2.1 Operating profit (EBIT) 33.3 4.7 38.0 Financial costs - net 4.7 0 4.7 Profit before income tax 28.6 4.7 33.3 Income taxes 9.2 1.5 10.7 Profit for the period 19.4 3.2 22.6 Non-controlling interests 0.1 0 0.1 Profit attributable to shareholders of the parent 19.4 3.2 22.6 Earnings per share (in EUR) 0.61 0.71 * Deviations may occur due to commercial rounding.
7 Strong positive organic sales growth in the areas of DS; EJT strengthened by EMEA NORMA Group posted sales of EUR 139.0 million in the EJT unit in the first quarter of 2016 and thus 0.1% more than in the same period of the previous year (Q1 2015: EUR 138.9 million). Sales of the DS unit, which has benefitted from the positive development in the area of water management, in particular, amounted to EUR 86.6 million and were thus 5.8% higher than in the first quarter of 2015 (EUR 81.8 million). Improvement of the cost of materials ratio Costs of materials amounted to EUR 90.1 million in the first quarter of 2016 and thus decreased by 1.0% compared to the same quarter of the previous year (Q1 2015: EUR 91.0 million adjusted). On the basis of revenues generated in the period January to March 2016, this resulted in a cost of materials ratio of 39.8%, which represents an improvement over the previous year (Q1 2015: 41.1% adjusted) of 1.3 percentage points. In the same period last year, the adjustments made to the costs of materials are related in an amount of EUR 2.4 million to expenses for raw materials, which are a result of the remeasurement of acquired inventories within the purchase price allocation for the acquisition of NDS. The unadjusted cost of materials ratio was 42.2%. Gross margin increased Gross profit (sales less the cost of materials plus changes in inventories and other own work capitalised) amounted to EUR 137.7 million in the first quarter of 2016. This equates to an increase of 3.5% compared to the first quarter of 2015 (EUR 133.1 million adjusted). This results in an improved gross margin of 60.8% in relation to sales (Q1 2015: 60.1% adjusted). Personnel cost ratio increases slightly As of 31 March 2016, NORMA Group had 6,322 employees worldwide, including temporary workers, 5,097 of whom belong to the Company s core workforce. This means the total number of employees increased by 1.6% compared to the previous year (Q1 2015: 6,225) and that the core workforce grew by 2.6%. Within the Americas and Asia-Pacific regions, the core workforce grew equally strongly by 2.1% each. This is partly due to the ramp up of another Distribution Center in the US. On the other hand, the core workforce in the Asia-Pacific region grew as a result of the building of a RE-Engineering Center. The number of employees in the EMEA region increased by 3.0% during the same period, mainly due to recruitment at the Serbian site. 2015 Annual Report, p. 70. As a result of the higher average headcount, expenses for employee benefits also increased by 4.4% to EUR 63.2 million in the first quarter of 2016 compared to the same period last year (Q1 2015: EUR 60.6 million). Based on sales, this resulted in an increased personnel cost ratio of 27.9% (Q1 2015: 27.3%). This increase in the personnel cost ratio can mainly be attributed to temporary below average revenue development in the Americas region in the first quarter of 2016. PERSONNEL DEVELOPMENT 31 Mar 2016 31 Mar 2015 EMEA 2,883 2,798 Americas 1,435 1,405 Asia-Pacific 779 763 Core workforce 5,097 4,966 Temporary workers 1,225 1,259 Total number of employees including temporary workers 6,322 6,225 Other operating income and expenses In the first quarter of 2016, the balance of other operating income and expenses amounted to EUR 29.1 million, which was 3.6% above the previous year s figure of EUR 28.1 million (adjusted). This increase compared to the same period last year is due to the increased activities of NORMA Group. In relation to sales, other operating income and expenses increased slightly compared to the same period last year and amounted to 12.8% (Q1 2015: 12.7%). Selected Notes to the Consolidated Statement of Comprehensive Income, p. 11. Within other operating income and expenses, acquisition-related costs in the amount of EUR 80 thousand were adjusted in the same period last year. Improved EBITDA and adjusted EBITA Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 45.4 million in the first quarter of 2016 and were thus 2.0% above the previous year s figure (Q1 2015: EUR 44.5 million adjusted). This results in an EBITDA margin of 20.0% (Q1 2015: 20.1% adjusted). Adjusted EBITA, which was adjusted for amortisation of tangible assets from purchase price allocations, amounted to EUR 40.1 million for the 3-month period January to March 2016. This represents a 2.2% increase over the previous year (Q1 2015: EUR 39.2 million). The resulting adjusted EBITA margin was unchanged compared to the same period last year at 17.7% and thus again remained at a sustained high level. Currency related increase of financial expenditure The financial result for the first quarter of 2016 amounted to EUR 4.7 million. In the same quarter of last year, it amounted to EUR 3.1 million. This change in the financial result is partly due to currency effects. Thus the high exchange rate volatility of the euro against the US dollar had a negative impact on the financial result, considering the dynamic security concept of current exposures. 2015 Annual Report, p. 146.
8 NORMA Group SE Interim Statement Q1 2016 Adjusted earnings after taxes Earnings after taxes adjusted for depreciation from purchase price allocations amounted to EUR 22.6 million in the reporting period and were thus 1.1% lower compared to the previous year (Q1 2015: EUR 22.9 million). Adjusted income taxes for the reporting period from January to March 2016 amounted to EUR 10.7 million (Q1 2015: EUR 11.5 million). This results in a lower adjusted tax rate of 32.1% compared to the previous year (Q1 2015: 33.5%), which is mainly due to the inclusion of NORMA Group SE in the German tax group since 2015. Adjusted earnings per share Adjusted earnings per share amounted to EUR 0.71 in the first quarter of 2016 (Q1 2015: EUR 0.72). Unadjusted earnings per share were EUR 0.61 and thus 8.5% higher (Q1 2015: EUR 0.56). NET ASSET POSITION Total assets Total assets as of 31 March 2016 amounted to EUR 1,164.1 million and were thus a slight 0.3% lower than at the end of 2015 (EUR 1,167.9 million). Compared to 31 March 2015 (EUR 1,185.4 million), they declined by 1.8% as a result of the appreciation of the euro against the US dollar. Assets impacted by currency effects Non-current assets amounted to EUR 767.6 million as of 31 March 2016. This means they declined by 3.3% compared to the end of 2015 (EUR 793.6 million). This can be attributed for the most part to currency effects caused by the appreciation of the euro as of the reporting date and resulted in a decrease in goodwill, other intangible assets and fixed assets. Non-current assets accounted for 65.9% of total assets as of 31 March 2016. Current assets amounted to EUR 396.5 million as of 31 March 2016 and thus rose by 5.9% compared to the end of 2015 (EUR 374.3 million). This increase resulted for the most part from the increase in trade receivables (EUR 15.9 million). By contrast, inventories decreased by EUR 4.6 million to EUR 125.3 million. Current assets accounted for 34.1% of total assets. Compared to the previous year (31 Mar 2015: EUR 372.9 million), current assets rose by 6.3%. Rise in (trade) working capital (Trade) working capital (inventories plus receivables minus liabilities, both primarily from trade payables and trade receivables) was EUR 172.5 million as of 31 March 2016, and thus 13.5% higher than at the end of the year 2015 (EUR 151.9 million) for seasonal reasons. The increase resulted primarily from the expansion of business activities and the increase in trade receivables, but also from the reduction in liabilities from goods and services. Compared to the previous year (31 Mar 2015: EUR 182.6 million), trade working capital declined by 5.5%. This can be attributed to the continued optimisation of working capital management. Group equity ratio continues to improve Group equity amounted to EUR 437.1 million on 31 March 2016 and was thus 1.7% higher than in December 2015 (EUR 429.8 million). This equates to an increased equity ratio of 37.5% (31 Dec 2015: 36.8%). The change in equity is mainly the result of the earnings for the period. By contrast, negative currency translation differences reduced Group equity. Selected Notes to the Consolidated Statement of Financial Position, p. 14. Net debt significantly lower Net debt amounted to EUR 347.8 million as of 31 March 2016 and thus declined by 3.6% compared to the end of the year (31 Dec 2015: EUR 360.9 million). This includes derivative hedging instruments in the amount of EUR 4.4 million. The reduction in net debt essentially resulted from the decline in loan liabilities in US dollars from the syndicated credit line and the promissory note issued in financial year 2014 due to exchange rate effects, but also from the increase in cash and cash equivalents. This resulted in gearing (net debt in relation to equity) of 0.80 (31 Dec 2015: 0.84) and leverage (net debt in relation to adjusted EBITDA) of 1.9 (31 Dec 2015: 2.0). Lower non-current liabilities, higher current liabilities Non-current liabilities amounted to EUR 563.8 million as of 31 March 2016 and were thus 2.0% lower than at the end of 2015 (EUR 575.4 million). This was due to the currency-related decline in financial liabilities in US dollars. This means non-current liabilities accounted for 48.4% of total assets (31 Dec 2015: 49.3%). Current liabilities, on the other hand, increased slightly by 0.4% from EUR 162.6 million at the end of the year to EUR 163.2 million and thus accounted for 14.0% of total assets at the end of the reporting period (31 Dec 2015: 13.9%).
9 FINANCIAL POSITION Group-wide financial management For a more detailed overview of NORMA Group s general financial management, please refer to the 2015 Annual Report. 2015 Annual Report, p. 53. Operating net cash flow Operating net cash flow amounted to EUR 11.8 million for the 3-month period and was thus 1.1% higher than in the same quarter of last year (Q1 2015: EUR 11.6 million). This was mainly due to a year on year increase in EBITDA (prior year adjusted) and reduced capital expenditure (Q1 2016: EUR 9.5 million; Q1 2015: EUR 10.5 million). By contrast, changes in working capital had the opposite effect (Q1 2016: EUR 24.1 million; Q1 2015: EUR 22.4 million). Cash flow from financing activities Cash flow from financing activities for the period January to March 2016 amounted to EUR 1.6 million (Q1 2015: EUR 12.2 million). This mainly comprises cash flows from interest paid in the amount of EUR 1.8 million (Q1 2015: EUR 2.6 million). Furthermore, cash flow from financing activities was impacted by payments received in connection with hedging derivatives in the amount of EUR 0.3 million (Q1 2015: EUR 10.0 million). Outlook The Management Board confirms the forecast published in the 2015 Annual Report without any changes. 2015 Annual Report, p. 77. In relation to total sales, net operating cash flow for the period January to March 2016 was unchanged at 5.2%. Cash flow from operating activities Cash inflow from operating activities amounted to EUR 19.4 million for the reporting period January to March 2016 (Q1 2015: EUR 10.3 million) and rose mainly as a result of improved working capital management. Selected Notes to the Consolidated Statement of Cash Flows, p. 17. Among other measures, NORMA Group uses a supplier-side reverse factoring programme to improve its working capital. An attempt is also made to optimise working capital on the customer side, however, by using the appropriate instruments, such as an Asset Backed Securities (ABS) programme, for example. 2015 Annual Report, p. 148. Cash flow from investing activities Cash flow from investing activities amounted to EUR 11.1 million in the first quarter of 2016 (Q1 2015: EUR 10.5 million) and was primarily influenced by payments made to purchase intangible assets and fixed assets (EUR 9.5 million). In addition, net payments for acquisitions from previous years (Q1 2016: EUR 1.6 million; Q1 2015: EUR 0.1 million) also had an impact on cash flow from investing activities. NORMA Group invests the funds from its operating cash flow in further growth and in the maintenance of its production machinery. The investments in the first quarter of 2016 related mainly to the sites in Germany, Serbia, Poland, China and the US.
10 NORMA Group SE Interim Statement Q1 2016 Consolidated Statement of Comprehensive Income for the period from 1 January to 31 March 2016 in EUR thousands Q1 2016 Q1 2015 Revenue 226,565 221,486 Changes in inventories of finished goods and work in progress 734 2,259 Other own work capitalised 495 335 Raw materials and consumables used 90,081 93,403 Gross profit 137,713 130,677 Other operating income 3,785 3,736 Other operating expenses 32,882 31,889 Employee benefits expense 63,228 60,557 Depreciation and amortisation 12,071 11,903 Operating profit 33,317 30,064 Financial income 20 154 Financial costs 4,707 3,295 Financial costs net 4,687 3,141 Profit before income tax 28,630 26,923 Income taxes 9,199 9,017 PROFIT FOR THE PERIOD 19,431 17,906 Other comprehensive income for the period, net of tax Other comprehensive income that can be reclassified to profit or loss, net of tax 12,046 27,423 Exchange differences on translation of foreign operations 10,804 27,970 Cash flow hedges, net of tax 1,242 547 Other comprehensive income for the period, net of tax 12,046 27,423 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 7,385 45,329 Profit attributable to Shareholders of the parent 19,374 17,838 Non-controlling interests 57 68 19,431 17,906 Total comprehensive income attributable to Shareholders of the parent 7,331 45,372 Non-controlling interests 54 43 7,385 45,329 Undiluted earnings per share (in EUR) 0.61 0.56
11 Selected Notes to the Consolidated Statement of Comprehensive Income REVENUE AND RAW MATERIALS AND CONSUMABLES USED Revenue for the first three months of 2016 (EUR 226,565 thousand) was 2.3% higher than revenue for the first three months of 2015 (EUR 221,486 thousand). EMPLOYEE BENEFITS EXPENSE In the first three months of 2016, employee benefits expense amounted to EUR 63,228 thousand compared to EUR 60,557 thousand in the first three months of 2015. This 4.4% increase is mainly due to an increase in the average headcount in the first three months of 2016 compared to the first three months of 2015. In relation to the total value, employee benefits expense increased slightly disproportionately higher with a ratio of 27.8% (Q1 2015: 27.0%). The raw materials and consumables used increased disproportionately lower in relation to revenues, leading to a ratio of 39.8% (Q1 2015: 42.2%). Also in relation to the total value, raw materials and consumables used are, with a ratio of 39.5%, below last year s level (Q1 2015: 41.7%). In 2015, EUR 2,434 thousand, associated with the acquisition of NDS, were adjusted within expenses for raw materials and consumables used, leading to an adjusted ratio of 40.6% in Q1 2015. OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES Other operating income in the first three months of 2016 totaled EUR 3,785 thousand, which was EUR 49 thousand higher than in the first three months of 2015 (EUR 3,736 thousand). Other operating income included, in particular, operational currency gains in the amount of EUR 2,292 thousand (Q1 2015: EUR 2,955 thousand), government grants and reversals from provisions as well as from accruals for compensation elements for employees. Average headcount was 5,117 in the first three months of 2016 (Q1 2015: 4,900). FINANCIAL RESULT The financial result for the first three months of 2016 (EUR 4,687 thousand) changed by EUR 1,546 thousand compared to the first three months of 2015 (EUR 3,141 thousand). In the first three months of 2016, net foreign exchange gains / losses (including income / expense from the valuation of foreign exchange derivatives) amounted to EUR 1,624 thousand (Q1 2015: EUR 1,020 thousand). Net interest expenses (EUR 2,864 thousand) decreased by EUR 1,132 thousand in the first three months of 2016 compared to the first three months of 2015 (EUR 3,996 thousand). Other operating expenses for the first three months of 2016 (EUR 32,882 thousand) were 3.1% higher than other operating expenses for the first three months of 2015 (EUR 31,889 thousand). In relation to the total value, other operating expenses increased slightly disproportionately higher with a ratio of 14.4% (Q1 2015: 14.2%). Other operating expenses included currency losses in the amount of EUR 1,885 thousand (Q1 2015: EUR 2,741 thousand). The composition of other operating expenses did not change significantly compared to financial year 2015.
12 NORMA Group SE Interim Statement Q1 2016 Consolidated Statement of Financial Position as of 31 March 2016 ASSETS in EUR thousands 31 March 2016 31 Dec 2015 31 March 2015 Non-current assets Goodwill 335,821 343,829 346,551 Other intangible assets 256,181 271,009 288,314 Property, plant and equipment 166,879 169,939 163,157 Other non-financial assets 227 234 318 Income tax assets 457 458 911 Deferred income tax assets 8,032 8,105 13,179 767,597 793,574 812,430 Current assets Inventories 125,312 129,902 130,789 Other non-financial assets 15,328 13,711 12,100 Other financial assets 3,902 3,856 2,621 Derivative financial assets 2,063 248 675 Income tax assets 6,189 3,772 2,559 Trade and other receivables 138,765 122,865 147,800 Cash and cash equivalents 104,957 99,951 76,389 396,516 374,305 372,933 Total assets 1,164,113 1,167,879 1,185,363
13 EQUITY AND LIABILITIES in EUR thousands 31 March 2016 31 Dec 2015 31 March 2015 Equity attributable to equity holders of the parent Subscribed capital 31,862 31,862 31,862 Capital reserves 210,323 210,323 216,603 Other reserves 9,085 21,128 30,030 Retained earnings 184,974 165,600 134,056 Equity attributable to shareholders 436,244 428,913 412,551 Non-controlling interests 864 898 816 Total equity 437,108 429,811 413,367 Liabilities Non-current liabilities Retirement benefit obligations 11,878 11,951 12,457 Provisions 10,507 10,842 6,799 Borrowings 435,274 443,711 367,149 Other non-financial liabilities 1,234 1,368 1,726 Other financial liabilities 658 681 4,174 Derivative financial liabilities 4,238 2,510 3,443 Deferred income tax liabilities 99,976 104,380 117,760 563,765 575,443 513,508 Current liabilities Provisions 9,820 9,972 6,714 Borrowings 7,889 7,056 79,308 Other non-financial liabilities 33,470 28,653 27,846 Other financial liabilities 4,508 6,019 2,281 Derivative financial liabilities 185 876 31,882 Income tax liabilities 15,751 9,172 14,420 Trade and other payables 91,617 100,877 96,037 163,240 162,625 258,488 Total liabilities 727,005 738,068 771,996 Total equity and liabilities 1,164,113 1,167,879 1,185,363
14 NORMA Group SE Interim Statement Q1 2016 Selected Notes to the Consolidated Statement of Financial Position PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS Intangible assets are as follows: Carrying amounts in EUR thousands 31 March 2016 31 Dec 2015 In the first three months of 2016, EUR 8,584 thousand were invested in property, plant and equipment and intangible assets, including own work capitalised in the amount of EUR 495. The main focus of investments was on expansion in Germany, Serbia, Poland, China and the USA. There were no major disinvestments. CURRENT ASSETS The increase in current assets is due to an increase in trade receivables resulting from the increased sales volume in the first quarter of 2016 compared to the last quarter of 2015. Furthermore, cash and cash equivalents increased by EUR 5,006 thousand despite cash outflows from investing activities in the amount of EUR 11,106 thousand. Goodwill 335,821 343,829 Customer lists 179,268 190,749 Licenses, rights 644 717 Software 9,518 10,384 Trademarks 43,320 45,586 Patents & technology 12,271 13,203 Internally generated intangible assets 6,024 6,259 Intangible assets, other 5,136 4,111 Total 592,002 614,838 The change in goodwill from EUR 343,829 thousand as of 31 December 2015 to EUR 335,821 thousand as of 31 March 2016 resulted from foreign exchange differences, mainly from the USD area. The change in goodwill is summarised as follows: in EUR thousands Balance as of 31 December 2015 343,829 Currency effect 8,008 Balance as of 31 March 2016 335,821 For details regarding the historical development of the cumulative amortisation and impairments, please refer to 2015 Annual Report. 2015 Annual Report, p. 138. Tangible assets are as follows: Carrying amounts in EUR thousands 31 March 2016 31 Dec 2015 Land and buildings 58,000 59,258 Machinery & tools 71,465 75,318 Other equipment 13,664 13,320 Assets under construction 23,751 22,043 Total 166,879 169,939 EQUITY Changes in equity resulted from the profit for the period (EUR 19,431 thousand), exchange differences on translation of foreign operations (EUR 10,804 thousand) and cash flow hedges (EUR 1,242 thousand). Furthermore, NORMA Group paid out dividends to non-controlling interests in the amount of EUR 88 thousand in the first three months of 2016. FINANCIAL DEBT NORMA Group s net debt is as follows: in EUR thousands 31 March 2016 31 Dec 2015 Bank borrowings, net 443,163 450,705 Derivative financial liabilities hedge accounting 4,266 3,312 Derivative financial liabilities held for trading 157 74 Other borrowings (e.g. factoring and reverse factoring) 0 62 Finance lease liabilities 247 289 Other financial liabilities 4,919 6,411 Financial debt 452,752 460,853 Cash and cash equivalents 104,957 99,951 Net debt 347,795 360,902 NORMA Group s financial debt decreased by 1.8% from EUR 460,853 thousand as of 31 December 2015 to EUR 452,752 thousand as of 31 March 2016. The decrease within the bank borrowings is due to effects from changes in the exchange rates on the USD portion of parts of the syndicated bank facilities issued in December 2015 and of the promissory note issued in financial year 2014. A slightly opposite effect results from the increase in the negative market value of the hedging derivatives. The decrease in other financial liabilities is due to the repayment of the contingent consideration resulting from the acquisition of National Diversified Sales, Inc. in 2014. Compared to 31 December 2015 (EUR 360,902 thousand), net debt decreased by EUR 13,107 thousand or 3.6% to EUR 347,795 thousand. An increase in cash and cash equivalents in the amount of EUR 5,006 thousand as well as a decline in USD
15 financial liabilities due to changes in the exchange rate positively influenced net debt, whereby valuation effects on derivatives had negative effects on net debt. The increase in cash and cash equivalents results from the increase of net cash provided by operating activities which overcompensated the cash outflows from investing and financing activities. The maturity of the syndicated bank facilities and the promissory note on 31 March 2016 is as follows: in EUR thousands up to 1 year > 1 year up to 2 years > 2 years up to 5 years > 5 years Bank borrowings, net 4,861 4,861 87,502 0 Promissory note, net 0 32,946 210,551 100,371 Total 4,861 37,807 298,053 100,371 Parts of the syndicated bank facilities and the majority of tranches of the promissory note with variable interest rates are hedged against interest rate changes. The derivative liability increased from EUR 2,510 thousand as of 31 December 2015 to EUR 4,238 thousand as of 31 March 2016. OTHER NON-FINANCIAL LIABILITIES The other non-financial liabilities are as follows: Foreign exchange derivatives classified as cash flow hedges are used to hedge foreign currency risk within the operative business. The foreign exchange derivatives classified as fair value hedges are used to hedge foreign currency risk of external debt and intragroup monetary items. As part of its financial risk management, NORMA Group not only employs traditional approaches, such as using so-called natural hedges to reduce USD exposure and rolling hedging with foreign currency derivatives, but has also delegated certain parts of its exposure to banking partners. The purpose of this instrument is to protect NORMA Group against any unfavourable exchange rate developments while at the same time letting the Company take advantage of positive developments in foreign exchange markets. A dynamic protection concept with variable rate hedging is used here that analyses market trends on the basis of quantitative models and implements these findings in a technical security model. All activities must always follow the strict requirements of internal risk management. Foreign exchange derivatives resulting from the described dynamic protection concept are classified as held for trading. On 31 March 2016, this led to foreign exchange derivatives with a positive market value of EUR 42 thousand and a negative market value of EUR 157 thousand. Interest rate swaps In order to avoid interest rate fluctuations, NORMA Group has hedged parts of its loans against changes in interest rates. in EUR thousands 31 March 2016 31 Dec 2015 The development of the effective part recognised in other comprehensive income in the first quarter of 2016 is as follows: Non-current Government grants 1,180 1,316 Other liabilities 54 52 1,234 1,368 Current Government grants 94 0 Non-income tax liabilities 3,533 1,559 Social liabilities 5,530 3,547 Personnel-related liabilities (e.g. holiday, bonus, premiums) 22,632 21,544 Deferred income 24 1,113 Prepayments received 931 0 Other liabilities 726 890 33,470 28,653 Total other non-financial liabilities 34,704 30,021 in EUR thousands Foreign exchange derivatives Interest rate swaps Total Balance as of 31 December 2015 24 2,509 2,485 Foreign currency translation effects 1 0 1 Reclassification in profit or loss 24 369 345 Net fair value changes 1 2,098 2,099 Balance as of 31 March 2016 2 4,238 4,240 Amounts recognised in the hedging reserve in equity will be released in profit or loss during the maturity of the loans. DERIVATIVE FINANCIAL INSTRUMENTS Foreign exchange derivatives On 31 March 2016, foreign exchange derivatives with a positive market value of EUR 198 thousand and a negative market value of EUR 16 thousand were classified as cash flow hedges. Furthermore, foreign exchange derivatives with a positive market value of EUR 1,823 thousand and a negative market value of EUR 12 thousand were classified as fair value hedges.
16 NORMA Group SE Interim Statement Q1 2016 Consolidated Statement of Cash Flows for the period from 1 January to 31 March 2016 in EUR thousands Q1 2016 Q1 2015 Operating activities Profit for the period 19,431 17,906 Depreciation and amortisation 12,071 11,903 Gain ( ) / loss (+) on disposal of property, plant and equipment 22 42 Change in provisions 490 1,126 Change in deferred taxes 224 54 Change in inventories, trade account receivables and other receivables, which are not attributable to investing or financing activities 22,747 35,403 Change in trade and other payables, which are not attributable to investing or financing activities 5,881 9,598 Change in reverse factoring liabilities 20 5,541 Interest expenses of the period 2,830 3,673 Income ( ) / expenses (+) due to measurement of derivatives within a hedge 2,640 12,818 Other non-cash expenses (+) / income ( ) 4,789 14,647 Net cash provided by operating activities 19,391 10,251 thereof interest received 36 20 thereof income taxes 4,997 5,918 Investing activities Payments for acquisitions of subsidiaries, net 1,622 52 Investments in property, plant and equipment and intangible assets 9,534 10,533 Proceeds from the sale of property, plant and equipment 50 80 Net cash used in investing activities 11,106 10,505 Financing activities Interest paid 1,773 2,565 Dividends paid to non-controlling interests 88 110 Proceeds from borrowings 22 451 Repayment of borrowings 62 0 Proceeds from / repayment of hedging derivatives 314 9,982 Repayment of lease liabilities 41 36 Net cash used in financing activities 1,628 12,242 Net change in cash and cash equivalents 6,657 12,496 Cash and cash equivalents at the beginning of the year 99,951 84,271 Effect of foreign exchange rates on cash and cash equivalents 1,651 4,614 Cash and cash equivalents at the end of the period 104,957 76,389
17 Selected Notes to the Consolidated Statement of Cash Flows In the statement of cash flows, a distinction is made between cash flows from operating activities, investing activities and financing activities. Net cash provided by operating activities is derived indirectly from profit for the period. The profit for the period is adjusted to eliminate non-cash expenses such as depreciation and amortisation as well as expenses and payments for which the cash effects are investing or financing cash flows and to eliminate other non-cash expenses and income. Net cash provided by operating activities of EUR 19,391 thousand (Q1 2015: EUR 10,251 thousand) represents changes in current assets, provisions and liabilities (excluding liabilities in connection with financing activities). The Group participates in a reverse factoring programme and in an ABS programme. The payments to the factor and from the ABS programme are included in cash flows from operating activities, as this represents the economic substance of the transactions. The correction of income due to measurement of derivatives within a hedge in the amount of EUR 2,640 thousand (Q1 2015: expenses in the amount of EUR 12,818 thousand) relates to fair value gains and losses recognised within the income statement assigned to the cash flows from financing activities. Other non-cash income ( ) / expenses (+) in net cash provided by operating activities mainly include foreign exchange rate gains and losses on external debt and intragroup monetary items in the amount of EUR 4,715 thousand (Q1 2015: EUR 15,133 thousand). Furthermore, other non-cash income ( ) / expenses (+) include non-cash interest expenses from the amortisation of accrued costs, amounting to EUR 74 thousand (Q1 2015: EUR 351 thousand). In the prior year, non-cash personnel expenses from the Matching Stock Programme amounting to EUR 135 thousand were also included in this position. Cash flows resulting from interest paid are disclosed as cash flows from financing activities. Cash flows from investing activities include net cash outflows from the acquisition and disposal of property, plant and equipment and intangible assets amounting to EUR 9,484 thousand (Q1 2015: EUR 10,453 thousand) including the repayment of liabilities from prior year investments in property, plant and equipment and intangible assets amounting to EUR 950 thousand (Q1 2015: EUR 4,071 thousand). Furthermore, net payments for acquisitions of subsidiaries in the amount of EUR 1,622 thousand (Q1 2015: EUR 52 thousand) are included in the cash flows from investing activities. Cash flows from financing activities mainly comprise outflows resulting from interest paid (Q1 2016: EUR 1,773 thousand, Q1 2015: EUR 2,565 thousand) as well as proceeds from hedging derivatives in the amount of EUR 314 thousand (Q1 2015: repayment of EUR 9,982 thousand). Furthermore, dividend payments to non-controlling interests in the amount of EUR 88 thousand (Q1 2015: EUR 110 thousand), net repayment from other loans amounting to EUR 40 thousand (Q1 2015: net proceed of EUR 451 thousand) and repayments from finance lease liabilities in the amount of EUR 41 thousand (Q1 2015: EUR 36 thousand) are disclosed as cash flows from financing activities. The changes in balance sheet items that are presented in the Consolidated Statement of Cash Flows cannot be derived directly from the balance sheet, as the effects of currency translation are non-cash transactions and changes in the consolidated Group are shown directly in the net cash used in investing activities. On 31 March 2016, cash and cash equivalents consisted of cash on hand and demand deposits of EUR 104,826 thousand (31 March 2015: EUR 75,800 thousand) as well as cash equivalents valued at EUR 131 thousand (31 March 2015: EUR 589 thousand).
18 NORMA Group SE Interim Statement Q1 2016 Segment Reporting for the period from 1 January to 31 March 2016 EMEA Americas Asia-Pacific in EUR thousands Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Total revenue 118,856 113,865 98,226 99,951 19,238 18,744 thereof inter-segment revenue 6,806 8,303 2,262 2,228 687 543 Revenue from external customers 112,050 105,562 95,964 97,723 18,551 18,201 Contribution to consolidated Group sales 50% 48% 42% 44% 8% 8% Gross profit 1 70,818 68,136 58,417 56,741 9,234 8,759 EBITDA 1 26,242 23,782 20,390 20,113 2,183 2,081 EBITDA margin 1,2 22.1% 20.9% 20.8% 20.1% 11.3% 11.1% Depreciation without PPA depreciation 3 2,510 2,401 1,882 1,968 631 625 Adjusted EBITA 23,732 21,381 18,508 18,145 1,552 1,456 Adjusted EBITA margin 2 20.0% 18.8% 18.8% 18.2% 8.1% 7.8% Assets (prior year as of 31 Dec 2015) 4 476,219 489,161 603,940 636,294 84,922 84,422 Liabilities (prior year as of 31 Dec 2015) 5 106,951 136,903 328,228 358,563 29,446 30,805 CAPEX 2,869 1,849 1,996 3,021 952 743 1 Adjusted in 2015. 2 Based on segment sales. 3 Depreciation from purchase price allocations. 4 Including allocated goodwills, taxes are shown within the column 'consolidations'. 5 Taxes are shown within the column 'consolidations'. Selected Notes to the Segment Reporting In the first three months of 2016, the share of sales realised internationally increased to around 78%, which means that this figure rose slightly compared to the previous year (Q1 2015: 77%). The main reason for this was the increase in sales in the EMEA region. EMEA External sales in the EMEA region amounted to EUR 112.1 million in the first quarter of 2016 and thus increased by 6.1% over the same quarter of the previous year (Q1 2015: EUR 105.6 million). This can be mainly attributed to the positive development in the area of EJT. The EMEA region s share of total sales amounted to approximately 50% (Q1 2015: 48%). EBITDA in the EMEA region as of 31 March 2016 amounted to EUR 26.2 million and was thus 10.3% higher than in the previous year (Q1 2015: EUR 23.8 million). This resulted in an EBITDA margin of 22.1% (Q1 2015: 20.9%). Adjusted EBITA for the 3-month period amounted to EUR 23.7 million and thus rose by 11.0% compared to the same quarter of the previous year (Q1 2015: EUR 21.4 million). Accordingly, the adjusted EBITA margin in the EMEA region was 20.0% (Q1 2015: 18.8%). Investments in the 3-month period amounted to EUR 2.9 million and were thus 55.2% higher than last year s level (Q1 2015: EUR 1.8 million). The EMEA region s assets were valued at EUR 476.2 million as of 31 March 2016 (31 Dec 2015: EUR 489.2 million). AMERICAS Sales growth in the Americas region was primarily negatively affected by the continued weakness of the commercial vehicle and agricultural machinery sectors in the Americas region. External sales amounted to EUR 96.0 million and were thus 1.8% lower than in the same quarter of the previous year (Q1 2015: EUR 97.7 million). This means the share of sales of the Americas region declined from around 44% (Q1 2015) to approximately 42% in the quarter that just ended.
19 Total segments Central functions Consolidation Consolidated Group Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 236,320 232,560 7,197 7,466 16,952 18,540 226,565 221,486 9,755 11,074 7,197 7,466 16,952 18,540 0 0 226,565 221,486 0 0 0 0 226,565 221,486 100% 100% 138,469 133,636 n/a n/a 756 525 137,713 133,111 48,815 45,976 3,382 1,536 45 41 45,388 44,481 20.0% 20.1% 5,023 4,994 244 241 0 0 5,267 5,235 43,792 40,982 3,626 1,777 45 41 40,121 39,246 17.7% 17.7% 1,165,081 1,209,877 359,122 404,821 360,090 446,819 1,164,113 1,167,879 464,625 526,271 520,734 556,760 258,354 344,963 727,005 738,068 5,817 5,613 2,767 849 n/a n/a 8,584 6,462 EBITDA in the Americas region amounted to EUR 20.4 million (Q1 2015: EUR 20.1 million adjusted). This resulted in an increased EBITDA margin of 20.8% (Q1 2015: 20.1% adjusted). Adjusted EBITA of EUR 18.1 million also rose by 2.0% from EUR 18.1 million in the same quarter of the previous year to EUR 18.5 million. This resulted in an adjusted EBITA margin of 18.8% (Q1 2015: 18.2%). Investments in the Americas region amounted to EUR 2.0 million for the 3-month period (Q1 2015: 3.0 million) and included mainly the plants in the US. Assets decreased by 5.1% to EUR 603.9 million as of the balance sheet date (31 Dec 2015: EUR 636.3 million). ASIA-PACIFIC The Asia-Pacific region generated external sales of EUR 18.6 million in the first quarter of 2016 (Q1 2015: EUR 18.2 million) and thus showed positive growth of 1.9%. Besides strong organic growth, negative currency effects had the opposite effect on sales. The share of sales of the Asia-Pacific region remained unchanged compared to the same quarter of the previous year at around 8%. EBITDA amounted to EUR 2.2 million and was thus 4.9% higher than last year s level (Q1 2015: EUR 2.1 million). The EBITDA margin amounted to 11.3% and thus increased compared to last year (Q1 2015: 11.1%). At the same time, adjusted EBITA increased to EUR 1.6 million (Q1 2015: EUR 1.5 million), which resulted in an 8.1% increase in the adjusted EBITA margin (Q1 2015: 7.8%). Investments amounted to EUR 1.0 million for the 3-month period (Q1 2015: EUR 0.7 million). Assets increased slightly by 0.6% to EUR 84.9 million compared to the end of 2015.
Financial Calendar 2016 04.05.2016 Publication of Q1 Interim Results 2016 02.06.2016 Annual General Meeting 2016 in Frankfurt / Main 03.08.2016 Publication of Q2 Interim Results 2016 02.11.2016 Publication of Q3 Interim Results 2016 The financial calendar is constantly updated. Please visit the Investor Relations section on the Company website @ http://investors.normagroup.com for up-to-date information. Contact and Imprint If you have any questions regarding NORMA Group or would like to be included in the distribution list, please contact the Investor Relations team: E-Mail: ir@normagroup.com Andreas Trösch Vice President Investor Relations Phone: + 49 6181 6102 741 Fax: + 49 6181 6102 7641 E-mail: andreas.troesch@normagroup.com Dana Feuerberg Manager Investor Relations Phone: + 49 6181 6102 748 Fax: + 49 6181 6102 7648 E-mail: dana.feuerberg@normagroup.com EDITOR NORMA Group SE Edisonstraße 4 63477 Maintal Germany Phone: + 49 6181 6102 740 E-mail: info@normagroup.com Internet: www.normagroup.com CONCEPT AND LAYOUT 3st kommunikation, Mainz Note on the interim statement This interim statement is also available in German. If there are differences between the two, the German version takes priority. Note on rounding Please note that slight differences may arise as a result of the use of rounded amounts and percentages. Forward-looking statements This interim statement contains certain future-oriented statements. Future-oriented statements include all statements which do not relate to historical facts and events and contain future-oriented expressions such as 'believe', 'estimate', 'assume', 'expect', 'forecast', 'intend', 'could' or 'should' or expressions of a similar kind. Such future-oriented statements are subject to risks and uncertainties since they relate to future events and are based on the company s current assumptions, which may not in the future take place or be fulfilled as expected. The company points out that such future-oriented statements provide no guarantee for the future and that the actual events including the financial position and profitability of the NORMA Group SE and developments in the economic and regulatory fundamentals may vary substantially (particularly on the down side) from those explicitly or implicitly assumed in these statements. Even if the actual assets for the NORMA Group SE, including its financial position and profitability and the economic and regulatory fundamentals, are in accordance with such future-oriented statements in this interim statement, no guarantee can be given that this will continue to be the case in the future.